Effective Oct. 28, 2004, the Check Clearing for the 21st Century Act (“the Act”) improves the ability of banks to use electronic images of paper checks by, for example, submitting those images, along with associated information, for electronic processing. Under the Act, if a receiving financial institution (“RI”) or its customer requires a paper check, a paper image replacement document (“IRD”), such as a paper “substitute check,” may be created from an electronic check image and associated electronic information. Under the Act, a substitute check meeting specified requirements is the legal equivalent of an original paper check, and an RI is required to accept the substitute check for payment. This process enables banks to reduce the costs and inconveniences associated with physically handling and transporting original paper checks.
Under the Act, the substitute check must be essentially an exact copy of the original paper check to be the legal equivalent of the original paper check. In particular, the substitute check must include an exact copy of all of the Magnetic Ink Character Recognition (“MICR”) data provided on the original paper check and all check endorsements.
The terms “substitute check” and “IRD” generally are used interchangeably herein to refer to any electronic or paper document that can be used for electronic payment processing purposes, whether or not the document is the legal equivalent of a paper check negotiable instrument. The terms “bank” and “RI” generally are used herein to refer to any party performing conventional or electronic check processing at any stage, including depositing and receiving institutions, their non-bank subsidiaries and affiliates, and any non-bank third party agents that provide processing services to banks.
A “cash letter” is a collection of one or more bundles of checks and/or IRDs (interchangeably collectively or individually referred to herein as “items”) that can be transmitted from a bank to an RI. Further, as used herein, a “cash letter” can comprise return items. A cash letter typically includes a cover page comprising information regarding the cash letter's contents. For example, the cover page can comprise the number of items in the cash letter, information identifying the transmitting bank, and/or information identifying the RI. For each bundle of items in the cash letter, the cash letter can include a bundle summary comprising the number of items in the bundle, the value of each of the items in the bundle, and the total value of all items in the bundle. The cash letter also can include a cash letter bundle summary comprising a total of the value of all the bundles in the cash letter.
A cash letter in electronic form, comprising images of the items and associated financial data, is referred to herein as an “image cash letter” or “ICL.” A cash letter in paper form, comprising paper items, is referred to herein as a “paper cash letter.” The cover page, bundle summaries, and cash letter bundle summary contained within a cash letter, whether paper or electronic, are collectively referred to herein as “audit data.”
A bank can submit a cash letter to an RI either in electronic or paper form. For example, the bank can submit a paper cash letter to an RI via conventional paper transport means, such as mail or truck delivery. Alternatively, the bank can communicate an ICL to an RI via an electronic data transport means, such as a distributed computer network.
Conventionally, preparation of a paper cash letter, either by the submitting bank or the RI, generally required: (1) aggregating one or more bundles of paper items (either original paper checks, substitute checks, or other printed paper items); (2) printing a bundle summary for each bundle; (3) printing a cash letter bundle summary for the cash letter; (4) printing a cover page for the cash letter; and (5) assembling the cash letter by matching the items to their respective bundle summaries, matching the bundles to the cash letter bundle summary, and matching the items, bundle summaries, and cash letter bundle summary to the cover page. Such preparation involves many inefficiencies, most notably the delay involved in manually matching the items, bundle summaries, cash letter bundle summary, and cover page together to assemble the paper cash letter.
A recent approach for overcoming these inefficiencies includes producing print streams for efficiently generating properly formatted and ordered paper cash letters with substitute checks and audit data. Certain exemplary methods and systems for producing such print streams are described in co-pending U.S. patent application Ser. No. 11/362,344, entitled “Cash Letter Print Streams With Audit Data,” the disclosure of which is hereby fully incorporated herein by reference. To date, banks have been unable to monitor the production of these print streams or the output of the corresponding paper cash letters.
In the traditional, paper processing arena, each paper cash letter component could be seen and touched throughout processing. Determining whether a paper cash letter was produced simply required looking in one or more trays at a bank processing station. Because Check 21 processing takes place electronically, banks do not have physical points at which they can make such determinations. Oftentimes, this inability results in failure of some paper cash letters to be produced and other paper cash letters to be printed two or more times.
Thus, a need exists in the art for a system and method for monitoring paper cash letter printing. Specifically, a need exists in the art for a system and method for verifying paper cash letter printing and for identifying duplicate printed paper cash letters.